Windfall taxes and tax "holidays"

[Klast Brell]

I'm too lazy to look it up now but I posted links last year (maybe 2 years ago)showing that while the top 5 percent pays 50% of the taxes they also earn 80% of the money. The more money you make the more access you have to ways of earning and spending that reduce your taxes.

[Tarfang_Trubasher]

Keep in mind too - those "top" people also own large corporations that employ thousands (hundred-thousands?) of Americans. Keep squeezing those owners with taxes, keep raising the cost of benefits, and keep cramming crappy hiring/firing rules down their throats...they'll be forced to whittle down some of their facilities to continue paying for the others.

Tax the rich isn't the answer, we're already one (if not the) of the richest nations in the world. Our Congress just doesn't get the mileage they should from our money.

I love a line I heard from Wanda Sykes -- "Put a single mom in Congress, and watch how far she stretches that dollar!"

-TF

[Partha]

Keep in mind too - those "top" people also own large corporations that employ thousands (hundred-thousands?) of Americans. Keep squeezing those owners with taxes, keep raising the cost of benefits, and keep cramming crappy hiring/firing rules down their throats...they'll be forced to whittle down some of their facilities to continue paying for the others.

I call bullshit on that one. They've been getting tax cut after tax cut for nearly 30 years, and DESPITE that, they've been outsourcing and scrimping and giving the big purple shaft to the country AND their workers. At the same time, they've been practicing wealth capture to the point where they control damn near as much (if not as much or more) of the yearly income of this country as the robber barons did in the '20s and early '30s.

If they can't learn social responsibility, someone has to make them responsible. Teddy Roosevelt and FDR both understood it.

[Embar Angylwrath]

People have this notion that just a few people (porportionally) own most of the corporations in the US. That simply isn't the case. Most of the corporations are owned by the general population. It's in your 401(k)s and other retirement plans. There are very, very few large privately held companies like Mars candy. Personal wealth in this country usulayy comes from two sources: inheritance and work. And someone initially worked for the money that funded the inheritance, so it all stems from work.

Want to get rich? Form a company, build the company, then sell it, or a large part of it. That's how people get rich.

[Partha]

Yes, because a company paid you pennies on the dollar of a loan they took out who knows when, you're an owner.

Which is why I, myself, walked onto the floor of the Microsoft offices and fired three people, then had a board meeting with Bill.

http://www.multinationalmonitor.org/mm2 ... wolff.html

MM: What portion of the wealth is owned by the upper groups?
Wolff: The top 5 percent own more than half of all wealth.

In 1998, they owned 59 percent of all wealth. Or to put it another way, the top 5 percent had more wealth than the remaining 95 percent of the population, collectively.

The top 20 percent owns over 80 percent of all wealth. In 1998, it owned 83 percent of all wealth.

This is a very concentrated distribution.

MM: Where does that leave the bottom tiers?
Wolff: The bottom 20 percent basically have zero wealth. They either have no assets, or their debt equals or exceeds their assets. The bottom 20 percent has typically accumulated no savings.

A household in the middle — the median household — has wealth of about $62,000. $62,000 is not insignificant, but if you consider that the top 1 percent of households’ average wealth is $12.5 million, you can see what a difference there is in the distribution.

MM: What kind of distribution of wealth is there for the different asset components?
Wolff: Things are even more concentrated if you exclude owner-occupied housing. It is nice to own a house and it provides all kinds of benefits, but it is not very liquid. You can’t really dispose of it, because you need some place to live.

The top 1 percent of families hold half of all non-home wealth.

The middle class’s major assets are their home, liquid assets like checking and savings accounts, CDs and money market funds, and pension accounts. For the average family, these assets make up 84 percent of their total wealth.

The richest 10 percent of families own about 85 percent of all outstanding stocks. They own about 85 percent of all financial securities, 90 percent of all business assets. These financial assets and business equity are even more concentrated than total wealth.

[Embar Angylwrath]

10 percent is, what, 30 million people?

[Ddrak]

Keep in mind too - those "top" people also own large corporations that employ thousands (hundred-thousands?) of Americans. Keep squeezing those owners with taxes, keep raising the cost of benefits, and keep cramming crappy hiring/firing rules down their throats...they'll be forced to whittle down some of their facilities to continue paying for the others.

It's true that the "top" people use that excuse to reduce pay etc. What's not true is the reverse happens - you lower taxes on the top and they don't usually push it down.

Interestingly enough, the only tax that actually makes any significant difference to government income is the taxes on the top 1-5%. The rest is really there to make people feel that they aren't getting a free ride (or something).

Tax the rich isn't the answer, we're already one (if not the) of the richest nations in the world. Our Congress just doesn't get the mileage they should from our money.

You've also got one of the lowest tax rates in the world, and the lowest number of government benefits in the world. I'm really not sure what you're actually comparing against when you make the above statement. If you want to cut government expenditure, start with the single biggest expense (and probably the most wasteful section) - the military.

Dd

[Partha]

10 percent is, what, 30 million people?

Not in any reality inhabited by humans not named Embar. I'll give you a bit to think over why that is.

[Trollbait]

10% would be closer to 11 or 12 million.

Even though the population is close to 300 million not everyone is a taxpayer.

[Embar Angylwrath]

The link Partha used listed "families" not "taxpayers". Its a spead of income divided by the entire population.

So... 30 million is the number.

[Partha]

Heheh. Keep trying. Unless, of course, you really count every single individual as a 'family'.

EDIT: Actually, Jecks has the correct number. However, you'll note that saying that there are 10-11 million 'families' that control that much wealth...well, the kids in that family don't control it, and quite a few of these families don't have two parents. Best guess from my estimate is that over half of all stocks and the rest are 'owned' by fewer than 20 million people, and a further breakdown will show that many of that 20 million don't own that much of the percentage. I'll look for more data.

[Embar Angylwrath]

You see in your own lionk the guy is listing "households" and "families", not individual wage earners?

[Partha]

Found this. Has a few tables.

http://sociology.ucsc.edu/whorulesameri ... ealth.html

In terms of types of financial wealth, the top one percent of households have 44.1% of all privately held stock, 58.0% of financial securities, and 57.3% of business equity. The top 10% have 85% to 90% of stock, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.

Numerous studies show that the wealth distribution has been extremely concentrated throughout American history, with the top 1% already owning 40-50% in large port cities like Boston, New York, and Charleston in the 19th century (Keister, 2005). It was very stable over the course of the 20th century, although there were small declines in the aftermath of the New Deal and World II, when most people were working and could save a little money. There were progressive income tax rates, too, which took some money from the rich to help with government services.

Then there was a further decline, or flattening, in the 1970s, but this time in good part due to a fall in stock prices, meaning that the rich lost some of the value in their stocks. By the late 1980s, however, the wealth distribution was almost as concentrated as it had been in 1929, when the top 1% had 44.2% of all wealth. It has continued to edge up since that time, with a slight decline from 1998 to 2001, before the economy crashed and little people got pushed down again. Table 3 and Figure 4 present the details from 1922 through 1998.

A key factor behind the high concentration of income, and the likely reason that the concentration has been increasing, can be seen by examining the distribution of what is called "capital income": income from capital gains, dividends, interest, and rents. In 2003, just 1% of all households -- those with after-tax incomes averaging $701,500 -- received 57.5% of all capital income, up from 40% in the early 1990s. On the other hand, the bottom 80% received only 12.6% of capital income, down by nearly half since 1983, when the bottom 80% received 23.5%. Figure 5 and Table 7 provide the details.

Capital gains, of course, are taxed at a LOWER rate than income, which is why Warren Buffett notes that his secretary has a bigger tax bite than he does.

[Embar Angylwrath]

How do you think those people got wealthy? (And as a side note, the article is careful to delineate "privately held stock" read: stock in corporations not publically traded.. most likely the corporations these individuals built themselves. Again, a result of their vision and work.)

This is testament to the American Dream. I find it reassuring that even Partha's info indicate people are able to build good lives for themselves with a great idea and some hard work.

Although Microsoft is a publically traded company, Bill Gates is a good example. An idea, some moxie, and some hard work...

[Partha]

Shorter Embar: Got spanked, waving the flag to distract as I retreat.

[Ddrak]

Although Microsoft is a publically traded company, Bill Gates is a good example. An idea, some moxie, and some hard work...

Of all possible examples, Gates is about the worst.

i) He started off wealthy.
ii) He never really had an "idea"
iii) Almost all of the money he now has was at the expense of people that actually did have an "idea".

In reality, Gates is probably a better example of how the American Dream is broken and why one company with unsavory business tactics and a monopoly position can destroy the hopes of anyone with an idea but no money to push it forward. Gates is very much a parallel to Standard Oil, AT&T or the robber barons.

Now if you've picked Jobs it would have been better.

Dd

[Kulaf]

Actually......if you had picked Woz. Jobs is just a loser marketing guy with dreams of granduer.

[Trollbait]

Actually the best example of "self made" is Warren Buffet....


Currently the worlds richest man and fellow Nebraskan.

[Embar Angylwrath]

And of course Buffet made his money on the backs of the working class...